We Provide Boutique Attention
with Big Box Expertise and Capacity
The Cleveland Company offers a wide range of employee benefit services allowing us the flexibility in creating a customized approach to meeting the varying needs of our clients. All of our team members are licensed and take pride in personally assisting you with your employee benefit packages such as MN group health insurance plans and much more.More About General Consulting, Education and Implementation
General Consulting, Education and Implementation include the following services:
- Fact finding and development of a long range strategic plan to create an effective, well-designed and well communicated employee benefits plan
- Complete RFP process for all health and welfare plans, analysis of carriers’ responses and recommendations consistent with our stated goals
- Communication of the employee benefits packages on an as needed basis. This can be as often as necessary to assure that plans are clearly and properly communicated and therefore appreciated
- The Semi-annual renewal planning
- The Cleveland Company Employee Benefits portal
- Human Resources consulting hotline
We offer the finest products, creatively designed, to assure the performance necessary to solve financial problems.
- Medical Insurance
- Dental insurance
- Medicare Supplements
- Pay Check Insurance
- Long-Term Care Insurance
- Vision Programs
- Voluntary Life Insurance
- Health Savings Accounts
- Health Reimbursement Accounts
- Flexible Spending/Dependent Care Accounts
- Transportation and Parking Reimbursements
- Retirement Plan Design/Communication and Investments
- Employee Assistance Programs (EAP)
- InsureEasy (Individual Medical Coverage)
Continue below for more information about some of the specific issues that Employers and HR Professionals deal with…
The Affordable Care Act (ACA) and How We Can Help You
What is the affordable Care Act (ACA) and how does it affect small businesses?
The Affordable Care Act, also known as the Patient Protection and Affordable Care Act (PPACA) was signed into law by President Barack Obama on 23rd March, 2010.
The Affordable Care Act aims to help small businesses get health insurance for their workers.More About the ACA
Below are some highlighted details on the Affordable Care Act:
- Employers with fewer than 25 workers may receive help in funding the cost of providing health insurance. Some small businesses are taking advantage of new tax credits which makes the purchasing of health insurance for employees more affordable. Small businesses are eligible if they provide health insurance for their employees, have no more than 25 full-time workers, and pay an average yearly salary of less than $50,000. Starting in 2014, the tax credit will be 50% for small businesses and 35% for non-profits.
- Health insurance policies will be available for all people with pre-existing conditions (insurance companies will not be allowed to refuse them). As from January, 2014, refusing coverage because of a pre-existing condition or disability will not be possible. Companies will not be allowed to raise an individual’s premiums for those reasons either.
The Affordable Care Act originally required employers with 50 or more employees working at least 30 hours a week to begin providing qualifying health insurance coverage to their workers by the beginning of 2014. In 2015, large employers with 100 or more employees were required to offer qualifying coverage to at least 70% of their workforce, but mid-sized employers with 50 to 99 employees weren’t required to take action.
In 2016, however, large employers saw the required coverage percentage rise from 70% to 95% of their employees. In addition, mid-sized employers now have to comply with the law and also meet the 95% requirement. Businesses with 49 or fewer employees continue to be exempt.
ACA has become a constantly evolving law, and it can be confusing for employers, participants and nonparticipants alike to figure out what they have to do from year to year. That’s why you need the expertise of The Cleveland Company.
At The Cleveland Company, your sales representative will be the lead consultant, assisted by a team of seasoned professionals who are fully equipped to provide you with top-tier service.
We will continually work on your behalf to ensure that your plans are ACA compliant, competitive, communicated and continue to meet the requirement of the law, as well as the needs of your company and employees.
Our methodical approach includes a timeline of scheduled events, processes and meetings which provide the certainty that today’s demanding economic climate requires for attracting and retaining the best employee workforce.
The Employee Retirement Income Security Act (ERISA) was signed in 1974. The U.S. Department of Labor (DOL) is the agency responsible for administering and enforcing this law. For many years, most of ERISA’s requirements applied to pension plans. However, in recent years that has changed, and group plans (called “welfare benefit plans” by ERISA and the DOL) now must meet a number of requirements.More about ERISA
- Health insurance – medical, dental, vision, prescription drug, health reimbursement arrangements (HRAs) and health flexible spending accounts (FSAs) (Health savings accounts are not governed by ERISA but the related high deductible health plan is.)
- Group life insurance
- Disability income or salary continuance unless paid entirely by the employer from its general assets
- Severance pay
- Funded vacation benefits, apprenticeship or other training programs, day care centers, scholarship funds, and prepaid legal services
- Any benefit described in section 302(c) of the Labor Management Relations Act (other than pensions on retirement or death)
Cafeteria plans, or plans governed by IRS Code Section 125, allow employers to help employees pay for expenses such as health insurance with pre-tax dollars. Employees are given a choice between a taxable benefit (cash) and two or more specified pre-tax qualified benefits, for example, health insurance. Employees are given the opportunity to select the benefits they want, just like an individual standing in the cafeteria line at lunch.
Only certain benefits can be offered through a cafeteria plan
- Coverage under an accident or health plan (which can include traditional health insurance, health maintenance organizations (HMOs), self-insured medical reimbursement plans such as HRAs, dental, vision, and more)
- Dependent care assistance benefits (DCAPs)
- Group term life insurance
- Paid time off, which allows employees the opportunity to buy or sell paid time off days
- 401(k) contributions
- Adoption assistance benefits
- Health savings accounts (HSAs) under IRS Code Section 223
Not all benefits offered under a cafeteria plan can or will be subject to ERISA, and employers should take care to understand the distinctions and interplay between ERISA requirements and cafeteria plan requirements.
Arrangements that are subject to ERISA must meet these reporting and disclosure requirements:
- Form 5500 annual reports and summary annual reports,
- A written plan document and summary plan description (SPD), and
- Participant notices.
Cafeteria plan sponsors should be aware of the cafeteria plan specific reporting that might be required, depending on a number of factors in the plan design and size:
- Form 5500 and schedules as required by ERISA for components of the plan
- Form W-2 reporting of DCAP benefits (if they are a benefit offered by the plan)
- Form W-2 reporting of employer-sponsored health coverage
- Employer shared responsibility and individual mandate reporting on employer-sponsored health coverage
ERISA affects cafeteria plans with ERISA subject components, and should be taken into account by cafeteria plan sponsors as they determine their total reporting and disclosure requirements.
Prior to 2002, cafeteria plan sponsors were required to file an annual return using Form 5500. In 2002 the IRS removed that requirement with IRS Notice 2002-24. Form 5500 is the annual report that plans make to the DOL and IRS to report required information about the plan’s financial condition and operations. There is, however, an exception for group plans with fewer than 100 participants as of the first day of the plan year and that are unfunded, insured, or a combination of unfunded and insured. A plan is considered unfunded if the employer pays the entire cost of the plan from its general accounts. A plan with a trust is considered funded.
Health FSAs are employee welfare benefit plans, and unless they fall under a regulatory exemption, employers must file an annual Form 5500 for those plans. Health FSAs are exempt from the annual filing if they:
- Cover fewer than 100 participants and are unfunded, fully insured, or a combination of insured and unfunded;
- Are a governmental plan; or
- Are a church plan under ERISA.
Many health FSAs are not fully or partially insured, so they would not fall under the first exemption. An unfunded welfare benefit plan is one that “has its benefits paid as needed directly from the general assets of the employer or employee organization that sponsors the plan.” Plans that use employee contributions or use a trust or separate fund to hold plan assets would be considered funded, unless the welfare benefit plan with employee contributions is offered under a cafeteria plan. In that instance, the plan would be considered unfunded.
The Form 5500 is due by the last day of the seventh month following the end of the plan year. For a calendar year plan, the deadline is July 31. A two-and-a-half-month extension is available.
Plan sponsors of cafeteria plans with multiple components that require Form 5500s must decide if they will use separate Form 5500s or use one Form 5500. Plan sponsors that want to use one Form 5500 would need to ensure their plan documents indicate that the components are being offered under a single plan. The calendar year in which the plan year begins dictates which Form 5500 should be used. For example, a plan year beginning in December 2014 would use the 2014 Form 5500 for that year.
Plan sponsors that prefer to report on each cafeteria plan component separately must give each plan its own plan number. All welfare plans that are subject to ERISA must choose a three-digit ERISA number that begins with a “5,” such as 501. This number is primarily used for Form 5500 purposes, although it must be included in the SPD. Each plan needs a discrete plan number. Once a plan number is used, it cannot be reused.
Cafeteria plan sponsors will need to consider the ERISA requirements for plan components that are subject to ERISA, as well to the requirements for cafeteria plan documents.
Cafeteria Plan Documents
An employer must decide to adopt a cafeteria plan prior to the plan’s effective date. A duly authorized officer of the corporation should then execute plan documents.
Cafeteria plan documents should contain the following information:
- Description of available benefits
- Participation rules
- Election procedures
- Manner of contributions
- Maximum amount of contributions
- The plan year
- Rules for purchasing and selling paid time off
- Provisions for FSAs
- Grace period provisions, if applicable
- Provisions relating to distributions from a health FSA to an HSA, if applicable
Cafeteria plans will also need documentation evidencing the adoption of the plan, any agreements with third parties that relate to the plan, election forms and salary reduction agreements, reimbursement request forms, forms for mid-year election changes due to permissible events, employee communications materials, COBRA forms, HIPAA disclosures and notices, privacy notices and business associate agreements, and claim denial forms. Cafeteria plans should also have applicable plan documents for the plans’ underlying components.
ERISA Plan Documents
A plan document is the official governing document for the plan. ERISA requires that it include the plan’s terms for a number of items including eligibility, benefits, exclusions, a named fiduciary and plan administrator, claims and appeals procedures, funding information, and other items. In most situations a group insurance policy will not include all of the required information and so will not qualify as a plan document. A written plan document should allow every employee, upon examination, to understand his or her rights and obligations under the plan.
A summary plan description, or SPD, is the document provided to participants to explain their rights and obligations under the plan. It is intended to provide a summary of the plan’s terms and should be written in a way the average participant can understand it. It has become increasingly common for plans to use a combination plan document/SPD, and most DOL offices permit this. If a combined document is used, the document must comply with both ERISA’s plan document requirements and applicable SPD format and content rules. Some courts have found, however, that it is unacceptable to have one document serve as a summary of itself, so employers who wish to use one document should consult their legal counsel. For some plans, it will be impossible to fulfill both plan document and SPD requirements in a single document.
Another option is to use a wrap plan, which is a plan document, or a combination plan document/SPD, that is designed to include all of the information required by ERISA through a combination of the information included in the insurance policy or certificate and additional information required by ERISA. Many employers use a wrap document that includes all or most of their group benefits, such as medical, dental, and life benefits.
This information is general and is provided for educational purposes only. It is not intended to provide legal advice.
You should not act on this information without consulting legal counsel or other knowledgeable advisors.
Benefit Administration System
Payroll Integration Paylocity Partnership
With our commitment to service and technology, you receive the best of both worlds when it comes to working with the Cleveland Company and payroll integration. More...
We partner with Paylocity to reduce redundancy of your everyday tasks. We offer an efficient, easy to use and understand systems that will streamline your time and remove your benefit headaches.
EaseCentral is a simple solution that allows companies to easily manage employee benefits, onboarding, and compliance in one central location. Third-party implementation is simply not needed. More...
What is a 1095 C?
The Affordable Care Act, or Obamacare, requires certain employers to offer health insurance coverage to full-time employees and their dependents. Further, those employers must send an annual statement to all employees eligible for coverage describing the insurance available to them. The Internal Revenue Service (IRS) created Form 1095-C to serve as that statement.
Who has to file Form 1095-C?
The health care law defines which employers must offer health insurance to their workers. The law refers to them as an “applicable large employer” or ALE. A company or organization is ALE if it has at least 50 full-time or full-time equivalents. A full-time worker, is deemed to be someone who works at least 30 hours a week.More about Form 1095
A full-time equivalent, meanwhile, is two or more part-time employees whose hours add up to a full-time load. Two workers who each put in 15 hours a week, for example, would make up one full-time equivalent (15 x 2 = 30 = 1 FTE). Only ALEs are required to file Form 1095-C.
Every employee of an ALE who is eligible for insurance coverage should receive a 1095-C. Eligible employees who decline to participate in their employer’s health plan will still receive a 1095-C. The form identifies:
- The employee and the employer
- Which months during the year the employee was eligible for coverage
- The cost of the cheapest monthly premium the employee could have paid under the plan
If an ALE does not offer its employees insurance, the 1095-C will indicate that fact. ALEs that don’t offer coverage may be subject to financial penalties.
Relationship to the 1095-B
Form 1095-C merely describes what coverage was made available to an employee. A separate form, the 1095-B, provides details about an employee’s actual insurance coverage, including who in the worker’s family was covered. This form is sent out by the insurance provider rather than the employer.
However, some companies are “self-insured,” meaning that they pay their workers’ medical bills themselves, rather than paying premiums to an insurance company.
- In the case of self-insured employers, the employer is also the insurance provider, so it will also send out 1095-B forms
- Employers in this situation can send the “B” and “C” forms on a single combined form
When the 1095-C must go out?
Sending out 1095-C forms became mandatory starting the 2015 tax year. Employers send the forms not only to their eligible employees but also to the IRS. Employees are supposed to receive them by the end of January — so forms for 2016 would be sent in January 2017.
Employers have until the end of February to send them to the IRS if filing paper forms, or until the end of March if filing electronically. Employers with 250 or more forms must file them electronically. Those with fewer than 250 have the option of filing paper forms or filing electronically.
Form 1095 C merely describes what coverage was made available to an employee. A separate form, the 1095-B, provides details about an employee’s actual insurance coverage, including who in the worker’s family was covered. This form is sent out by the insurance provider rather than the employer.
In the case of self-insured employers, the employer is also the insurance provider, so it will also send out 1095-B forms. Employers in this situation can send the “B” and “C” forms on a single combined form.